With the Budget just days away, I’ve stayed away from reporting on the Government’s response to the Henry Review…. let’s face it, it wasn’t much of a response (especially after the hype). These proposals are widely reported elsewhere which is why I have held off for now and thought I would include the response with Budget announcements.
However, I continue to receive emails from concerned employers asking about the proposed Super changes and how exactly these will be introduced. At the moment employers pay compulsory SG of 9% of an employee’s Ordinary Time Earnings (OTE). Yes, the government plans to increase the SG to 12%, however it will not reach this level until the 2019-2020 financial year.
Here’s how it will look:
2013-14: 9.25%
2014-15: 9.50%
2015-16: 10.0%
2016-17: 10.5%
2017-18: 11.0%
2018-19: 11.5%
2019-20: 12.0%
As a result of these changes, one of two things will happen. Either small business operating costs will increase as they absorb the additional SG or we’ll see employee’s taking home lower wages.
The reduction in the company tax rate from 30% to 28% will help some business owners cope with increased super obligations, however the vast majority of small businesseses in this country do not operate through a corporate structure and seem to have been forgotten entirely by Government.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
Christie has written 799 awesome articles for us at Alan Lewis Accountants – BLOG
Twitter: @christielewis
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